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We are a strata of around 160 units in Sydney and our caretaker/building manager agreement was set up by the developer (Meriton) and has been in place with the same caretaker since 2000. The agreement is in its final 5 year term. The contract provisioned for annual CPI increases and a market review every 5 years. The Caretaker is looking for a significant increase in their current renumeration based on an increase in the hourly rate. Is there any industry data available which will help our owners committee understand what the typical market rates for caretakers/building manager’s currently are.
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Two points to consider.
As far as I can tell, like strata managers, there is no standard fee. It depends on what the building manager does.
So if their contract is up for renewal, go out to the market and get some quotes. Let the incumbent know that you are getting other quotes. Thst will force him to sharpen his pencil. Don’t be surprised if you get some good deals. The habit of yearly increases of CPI tends to make the current supplier overpriced. I’m sure the encumbering will be miffed. Strata managers and building managers are depending on the lack of inertia of the OC to stay employed.
Secondly, the OC is entering into a contract. By definition , in a non monopolistic market, the contract is an agreement between two parties, where the contract represents a meeting of the minds. You are not obliged to take the terms offered by the building manager. Get your best negotiator on the case and negotiate the conditions you are happy with. Remember thst the building manager wants to keep your business and will accomodate your requests, to a point. But he may not be happy about it.
Your building manager is an easily replaceable service. Don’t let them convince you otherwise.I agree. There are some excellent building facilities management companies around and this is a terrific opportunity to get better service either from your current manager or a new one.
You should also consider joining the Owners Corporation Network (OCN.org.au). Existing members will give you good advice on which companies to go for and which to avoid (although you might well start with our sponsors Strata Choice).
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